Huntsman to further restructure in Switzerland on strong currency

14 September 2011 17:39  [Source: ICIS news]

HOUSTON (ICIS)--Huntsman will further restructure its textile chemicals businesses in Switzerland as the strong Swiss franc has made production in that country unattractive, a senior executive at the US-based chemicals major said on Wednesday.

In addition to the currency effect – with “at least $50m [€37m] of annual headwind” for Huntsman – the textile chemicals business is faced with sluggish demand in some segments, said chief financial officer Kimo Esplin.

“We would expect this business to get worse before it gets better,” Esplin told analysts at a webcast investor conference in New York.

Primarily, Huntsman needs to further restructure its Swiss manufacturing footprint as Switzerland is a “very, very high-cost region right now,” he said.

Esplin told analysts to expect Huntsman taking restructuring charges as it tries to turn the textile chemicals business around.

While textile chemicals is “not something we have to have,” Huntsman believes it can be fixed, Esplin added.

The restructuring will come on top of Huntsman having already cut some 1,200 jobs in textile chemicals in recent years, he added.

In 2009, Huntsman moved the headquarters of the global textile chemicals business from Switzerland to Singapore.

In related news, Switzerland’s central bank last week announced a currency peg of Swiss franc 1.20 to the euro to prevent a further appreciation of the franc.

Switzerland’s chemical producers trade association welcomed the bank’s move, and some economists have expressed understanding, saying that the Swiss franc is caught as an innocent bystander amid the US and eurozone debt crises.

($1 = €0.73)

For more on Huntsman and other producers visit ICIS company intelligence
Read Paul Hodges’ Chemicals and the Economy Blog

By: Stefan Baumgarten
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